THE YIN AND YANG OF BEER DISTRIBUTION LAW AND FRANCHISING

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Beer Distribution Laws differ from traditional

franchise laws that govern restaurant, retail and service

businesses in many ways, but they do share some commonalities.

As a matter of fact, many states now regulate

the relationship between those who brew or import beer

into a particular state, known as brewers, and those who

receive beer, warehouse beer and distribute beer to retailers,

known as distributors, by way of special relationship

statutes that have been patterned after, and closely resemble,

the relationship statutes many states have passed to

protect franchisees in traditional franchise relationships.

While beer distributorship arrangements

are distinctly different from traditional

franchise arrangements, it is clear there are certain

commonalities. Modern beer laws

governing beer distribution relationships between

brewers and distributors have been patterned after

franchise relationships laws. After all, brewers resemble

franchisors in that they tend to hold a lion’s

share of the power in the beer distribution business

relationship. Accordingly, we can expect more and

more states to pass relationship laws aimed at further

balancing power in favor of distributors, as we

continue to see in franchising, and to require good

faith dealings between the parties in each of these

contractual arrangements.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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